CHAROTAR UNIVERSITY OF SCIENCE AND TECHNOLOGY (CHARUSAT)

FACULTY OF MANAGEMENT STUDIES (FMS)

INDUKAKA IPCOWALA INSTITUTE OF MANAGEMENT
BBA PROGRAMME (2018 – 21)
SEMESTER – 5

A PRESENTATION ON
BM301.1 ORGANIZATION ATTACHMENT PROGRAMME (OAP)

INDUSTRY ANALYSIS: Cigarette INDUSTRY

ORGANIZATION STUDY: ITC LTD.

Student ID. No. :18BBA033

Submitted to :
Student Name: Abhishek P Meghwani
M.S Kesha Patel
Programme: BBA
Semester: 5

1
 Phase 1 Evolution and growth of Cigarette industry
in world
• Cigarette smoking is so common within the world's population and prevalence has increased
markedly over also the popularity of electronic nicotine delivery systems and electronic non-
nicotine delivery systems (ENDS/ENNDS) are rapidly increasing the past decades in many
countries over the world.
• One of the most popular products in the market is the ENDS/ENNDS. There is growing interest
and concern about e-cigarettes in many countries because e-cigarettes have been widely advertised
in many countries in the past few years, mostly through the internet.
• Distributors of e-cigarettes promote the product as completely free of harmful substances.
Nonetheless, some distributors present their products as an alternative to tobacco smoking,
suggesting that e-cigarettes can be used to aid smoking cessation.
• During the past few years e-cigarettes have been gaining popularity, also future perspectives of the
tobacco industry in the face of the fast growing market of e-cigarettes and technological
development, industrial growth, changing user demands are caused represent of new product such
as next generation e-cigarettes in global market.
 Continue
• In the 16th century, the consumption, cultivation, and trading of tobacco quickly spread and after that the first
commercial cigarettes were made in 1865. After that rates of cigarette smoking widely increase throughout
the world. Inventor Herbert A. Gilbert who on presented invention in 1963 and patented in 1965 that
represent the main characteristics of e-cigarettes from United States Patent Office the name of smokeless non
tobacco cigarette.
• E-cigarettes industries have a latent period forty years from 1963 to 2003. The history of e-cigarette then
restarted in 2003. From Chinese pharmacist Hon Lik invention of e-cigarettes that is a first prototype of uses
a lithium battery to produce energy to vaporize glycerol and a nicotine solution through a piezoelectric
device.
• During the past few years e-cigarettes have been gaining popularity, also future perspectives of the tobacco
industry in the face of the fast growing market of e-cigarettes and technological development, industrial
growth, changing user demands are caused represent of new product such as next generation e-cigarettes in
global market.
• Distributors of e-cigarettes promote the product as completely free of harmful substances. Nonetheless, some
distributors present their products as an alternative to tobacco smoking, suggesting that e-cigarettes can be
used to aid smoking cessation. The benefits and risks of e-cigarette use are uncertain as the technology is
relatively new.
 History

• Tobacco was acquainted with India in the seventeenth century.

• As indicated by another investigation, the quantity of men smoking tobacco in India has expanded
by more than 33% to 108 million somewhere in the range of 1998 and 2015.
• The University of Toronto concentrate additionally found that cigarettes were supplanting the
conventional bidi, a little, modest Indian cigarette, perhaps because of generously higher pay in
India and populace development. By 2015 there were generally equivalent quantities of men ages
15-69 years smoking cigarettes or bidis: roughly 61 million Indian grown-up men smoked
cigarettes (40 million only) and 69 million smoked bidis (48 million only).
• Study creator Dr Prabhat Jha has asked the Indian government to expand tobacco charges in its
February 29 financial plan.
• Dr Jha, chief of the Center for Global Health Research of St Michael's Hospital, has indicated that
raising the expense on tobacco is the absolute best intercession to bring down smoking rates and to
stop future smokers.
 Continue
• The examination found the quantity of men smoking any sort of tobacco at ages 15-69 years rose by
around 29 million, or 36% from 79 million of every 1998 to 108 million of every 2015, speaking to
a normal yearly increment of about 1.7 million male smokers.
• The general age-balanced smoking predominance at ages 15-69 years declined unobtrusively from
27% in 1998 to 24 % in 2010 yet complete numbers rose because of populace development.
• The exploration shows that the quantity of smokers rose around 68 percent from 19 to 31 million in
urban India and about 26% from 61 to 77 million in rustic India. At the ages 15-69 years, there were
around 11 million ladies who smoked (around one-tenth of the absolute of male smokers).
• In 2015, at ages 45-59 years, there are around four current smokers for each slacker. Paradoxically,
in North America, where smoking end is presently normal, there are a bigger number of slackers
than current smokers at these ages.
• In 2010 smoking caused around 1 million passings or 10% of all passings in India, with about 70%
of those passing's happening between the ages of 30 and 69, what ought to be the prime of their
lives .
 Advancement and Growth of cigarette industry of
ITC
• The Company was joined on August 24, 1910 under the name Imperial Tobacco Company of India
Limited. As the Company's proprietorship logically Indianized, the name of the Company was
changed to India Tobacco Company Limited in 1970 and afterward to I.T.C.
• The Food and Agricultural Organization has figure a yearly development rate in worldwide
tobacco creation and utilization at around 1.9%.
• The world market for tobacco items developed by 32% throughout the most recent five years - the
most recent time frame for which genuine information is accessible - and was esteemed at around
US$ 235 billion of every 1994.
• China is the single biggest market, representing over 30% of worldwide utilization.
• Worldwide cigarette utilization has developed by 22% since 1980 and was evaluated at 5,422
billion sticks in 1995.
 Continue
• Yearly world tobacco creation in 1994 was assessed at 7 billion kgs, of
which 1.7 billion kgs esteemed at around US$ 5 billion were
exchanged universally.
• Global exchange tobacco items is developing quickly. More than 900
billion cigarettes (16.5% of worldwide creation), esteemed at US$ 25
billion were exchanged globally in 1994.
• The USA represented practically 22% of worldwide cigarette sends
out that contributed in abundance of $ 5 billion to the nation's
equalization of installments.
 The Indian tobacco Market

• India is the third biggest maker of tobacco on the planet. A sum of 450 million kgs of tobacco was
delivered in 1995.
• Just 80 million kgs were utilized for household cigarette creation and 55 million kgs sent out as
cigarette tobaccos.
• In the UK, cigarette share went up from 12% in 1890 to 79% in 1995. In Italy, cigarettes comprise
98% of utilization today contrasted with 5% in 1900.
• The portion of cigarettes has declined to 20% from 23% in 1971, while generally tobacco
utilization has developed. Truth be told, industry volumes of cigarettes declined by 12.5% between
1984/85 and 1994/95 preceding organizing a recuperation in 1995/96.
• There are around 200 million tobacco buyers in India, of which just 25 million smoke cigarettes,
while 275 million in China smoke cigarettes out of 330 million tobacco purchasers.
 Enhancing Government Revenue
• Worldwide interest is confined to cigarette type tobaccos of indicated quality. India's tobacco trades
at Rs. 421 crores are miniscule, given the size of our tobacco showcase.
• Practically 90% of Government incomes gather from cigarettes, leaving 88% of tobacco customers
adequately outside the expense net.
• Extract income gathered from cigarettes is separated between the Center and the States in a
proportion dictated by the Central Government.
• In the West, tobacco and cigarettes have gotten equal, not at all like in India, where about 88% of
customers do no smoke cigarettes.
• Any push to direct the tobacco business subsequently should consider the business' capacity to
agree. To control only the 12% cigarette fragment would invalidate the very point of such guideline.
• The law was stretched out to biting tobacco in 1986 and gutka in 1990. Other tobacco items are as
yet not required to convey any legal admonition. Clearly, the legal wellbeing cautioning
prerequisites on tobacco utilization should be consistently appropriate to all tobacco items.
 Market Players and Market Share
• India is the second biggest maker and third Products
biggest exporter of tobacco on the planet. The
tobacco business gives work to ~46 Mn
individuals. With the advancing offices gave
by the Tobacco Board of India, the market has
recorded an aggregate (produced and
unmanufactured tobacco) fare of INR 60.84
Bn in FY 2018.
• Cigarette charges (64% extract obligation,
28% GST, and 5% cess) in India are among
the most noteworthy on the planet.
• The Global Cigarette Market was esteemed at
USD 726.94 billion in the year 2018.
 Continue
• In 1999, a World Bank survey inferred that, all else being equivalent, value ascents of about 10%
would on normal decrease tobacco utilization by about 4% in created nations and about 8% in
creating nations. Overall, a 10% expansion in cost will be trailed by a reduction in utilization of
4.8%.
• As indicated by The Tobacco Atlas, assessments of incomes from the worldwide tobacco industry
likely methodology a half trillion U.S. dollars every year. In 2010, the joined benefits of the six
driving tobacco organizations was U.S. $35.1 billion, equivalent to the consolidated benefits of
Coca-Cola, Microsoft, and McDonald's around the same time.
• Cigarette organizations have created modern battles focusing on men, ladies, and youngsters in
various financial gatherings.
• A significant number of these techniques go around the Indian tobacco publicizing boycott.
Understanding these promoting systems is basic to mimimise the misuse of provisos in tobacco
control enactment.
 Recent Trends
• The worldwide tobacco showcase size was esteemed at USD 849.09 billion out of 2019 and is
relied upon to develop at a compound yearly development rate (CAGR) of 3.1% from 2020 to
2027.
• As per the American Lung Association, the utilization of tobacco items has expanded from 28.2
percent to 31.2 percent among secondary school understudies from 2002 to 2019 in U.S.
• World Health Organization's worldwide report on pattern in commonness of tobacco utilize
distributed in 2019, the quantity of male tobacco clients on the planet was expanding every year
during 2000 to 2018. In 2018, the quantity of clients over the globe was seen as 1093 billion.
• In 2017, tobacco organizations spent USD 9.36 billion on advertising its completed items in U.S
 Continue
• Cigarettes drove the market and represented over 70.0% portion of the worldwide income in 2019.
• As indicated by an examination distributed by the National Survey on Drug Use and Health,
2016, smoking rate is commonly high in non-metropolitan regions, alongside the Midwestern and
Southern locales of U.S.
• As indicated by the CDC, in 2018, almost 13.7% of the U.S. grown-ups matured 18 years+
smoked cigarettes.
• This implies an expected 34.2 million grown-ups were cigarette smokers in U.S.
• Cigarette utilization is developing quickly in chosen markets. E-cigarette deals happen through
numerous dispersion channels, for example, retail locations, vape stores, and on the web.
 P E S T E L
Political Economic Social Technologica Environmental Legal
l
Governments around Individuals getting Tobacco contains the The 21st century Each time a cigarette is In most
the globe have more extravagant. energizer nicotine, which saw the inappropriately disposed created
realized that tobacco Stop spent money on just so happens to be an advancement of of, another poisonous nations, it’s
items affect your things that aren’t addictive compound. another option in synthetic is discharged illegal for
wellbeing. essential. E.g. contrast to into nature. those younger
Tobacco. smoking, known than 18 to buy
as vaping. and expend
cigarettes.
Rather than In many nations, People who begin devouring Vaping gadgets the most famous tobacco laws become
prohibiting them, people as of now tobacco items effectively get impersonate the items, contain exceptional progressively
numerous have all that could "snared" and can't stop. vibe of smoking substance channels in prohibitive,
administrations have possibly be needed These addictions become by containing their end. planning to
selected extra money to buy more grounded and more some measure of decrease
tobacco. grounded. nicotine. utilization of
tobacco.
To decrease Then in creating Numerous non-smokers vaping is we may see a push against it's conceivable
utilization (and nations, this incline toward not to breathe drawing interest cigarettes from a that
create extra income additional money in the recycled smoke of away from contamination stance. administrations
for themselves) by may cause a stamped others, offering ascend to conventional will expand the
applying higher duty increment in the no-smoke regions over the tobacco. age edge from
rates to tobacco interest for tobacco world which people
can purchase
items
and use
tobacco.
 Porter's Five Force Model
1. Threats of New Entry
• Already have cigarettes at different
price, flavors ,brand.
• Distribution channel is tough.
• High tax

4. Power of Buyers
5. Rivalry among existing • Addiction- Even after knowing harm
3. Power of Suppliers
• Cigarettes company have direct access to competitors can’t leave it.
• Many competing players: ITC, Bristol, • Research shows many people cannot
distribution channel and addictive buyers.
• Suppliers don’t have much control over etc. differentiate among brands in a blind
smokers. • Price competition is high. taste.
• Advertisement is prohibited in India. • Low switching costs in terms of Price.
• Many unorganized suppliers.

2. Threats of Substitutes
• Herbal cigarettes were launched but do not
become successful.
• Same happen with nicotine patch.
• So no other substitute in tobacco.
 SWOT Analysis
Strength Weakness
• Logistical capacity • Slow transitions in ‘lower- and middle income
• Customer base countries.
• Nicotine expertise • (Historically) bureaucratic : ANDS came as a surprise.
• Money • Poor reputation

Opportunities Threats
• Diversification
• Other tobacco multinationals
• Sustainable business model
• Independent companies
• Scientific respectability
• Reputational gain
 BCG Matrix
• CASH COW:
• Cash cows are the items that have a high piece of the pie in a market that has low development. For ITC,
there is one item that has without a doubt been the Cash Cow and its FMCG Cigarettes.
• Having a piece of the pie of 80-85 %, ITC Cigarettes holds an extremely solid hold in the market.
• The item requires extremely less venture to keep up its piece of the overall industry and fend off any
opposition.

• STARS:
• High market share products in high growth industry are considered Stars of the organization.
• ITC’s paperboard and packaging business, Agribusiness and Hotels are the Stars of the organization.
 Continue
• QUESTION MARK:
• There are items that figure a piece of the business that is still in the period of improvement, yet
the association has not had the option to make a critical situation in that industry.
• With solid rivalry and the developing interest for ayurvedic items has provoked ITC

• DOGS:
• Dogs are those products that were perceived to have the potential to grow but however failed to
create magic due to the slow market growth.
• Since the product is not expected to bring in any significant capital
• Heavy competition from the likes of Infosys, TCS, Accenture, HCL etc
McKinsey 7s Model Analysis
 Phase 2 Introduction.
• Established in 1910
• Company was incorporated on August 24, 1910 under the name Imperial Tobacco Company of
India Limited.
• Despite the fact that the initial six many years of the Company's presence were essentially
committed to the development and solidification of the Cigarettes and Leaf Tobacco organizations
• ITC's Packaging and Printing Business was set up in 1925 as a vital in reverse mix for ITC's
Cigarettes business. It is today India's most advanced bundling house.
• The Seventies saw the beginnings of a corporate change that would introduce groundbreaking
changes in the life of the Company.
• In 1979, ITC entered the Paperboards business by advancing ITC Bhadrachalam Paperboards
Limited.
 Continue
• In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint endeavor.
• In 1990, ITC obtained Tribeni Tissues Limited, a Specialty paper fabricating organization and a
significant provider of tissue paper to the cigarette business.
• In 1990, utilizing its agri-sourcing competency, ITC set up the Agri Business Division for fare of
agri-items.
• ITC propelled line of premium scope of note pads under brand Paperkraft in 2002.
• ITC likewise entered the Lifestyle Retailing business with the Wills Sport scope of worldwide
quality loosened up wear for people in 2000.
• In 2000, ITC spun off its data innovation business into a completely possessed auxiliary, ITC
Infotech India Limited, to all the more forcefully seek after developing open doors here.
• ITC's invasion into the Foods business is a remarkable case of effectively mixing different inside
capabilities to make another driver of business development.
• In a little more than 10 years and an a large portion of, the Foods business has developed
• In 2010, ITC propelled its handrolled stogie, Armenteros, in the Indian market.
 Details of Promoters and Owners

Holder's Name No of Shares % Share Holding

No Of Shares 12292231241 100%

Foreign Institutions 1798004090 14.63%

N Banks Mutual Funds 1219868308 9.92%

Others 3989526113 32.46%

General Public 1276157837 10.38%

Financial Institutions 3993453034 32.49%

GDR 15221859 0.12%

Organizational structure
 Salient Features of ITC ltd.

 Primary Education Initiative: Benefitting nearly 5,60,000 children

 Skilling & Vocational Training Initiative :More than 55,000 youth trained
 Health & Sanitation Programme: Over 31,000 low-cost sanitary units constructed
 Renewable Energy: Over 43% of energy consumption at ITC is from renewable sources
 Promoting Sustainable Agricultural Practices: Increasing farm productivity and farmer incomes
Covering 4,15,000 acres
 Solid Waste Management Initiative: Well-being Out of Waste programme covers 77,00,000
citizens
 Afforestation Programme: Greening more than 6, 80,000 acres
 Watershed Development Programme: Providing Soil & Moisture conservation to nearly 8,75,000
acres of drylands
 Livestock Development Initiative: Providing animal husbandry services in seven States and 25
Districts
 Women Empowerment Initiative: Creating over 61,000 sustainable livelihoods for women
 Mission & Vision

• Mission
• To enhance the wealth generating capability of the enterprise in a globalization environment,
delivering superior and sustainable Stakeholder value. Trusteeship, customer focus, respect for
people, excellence and innovation are the core values of ITC Ltd.
 
• Vision
• Sustain ITC’s position as one of India’s most valuable corporation through world-class performance,
creating growing value for the Indian economy and Company’s stakeholders.
Objective of the company
 SWOT analysis of company

• Strengths • Weaknesses
• Arrangement of Business • High Proportion of incomes from Tobacco items
• Solid Brands in different organizations • Relationship with Tobacco Products influences the
• Compelling Social Business Initiatives picture
• Entomb and Intra-divisional Synergy • An expansion in Tax on Tobacco influences income

• Opportunities • Threats
• Key Acquisitions • Increasing Competition in FMCG organizations
• Development in Purchasing power and improving way • Exacting Regulations and Increasing Taxation in
of life Cigarette Business
• Developing Personal Hygiene just as Food preparing • Expanding mindfulness on wellbeing
Industry in India
• Tap openings made in the Rural Market
Finance Department Structure
 Finance Department

• Introduction
• The part of an organization that manages its money. The business functions of
a finance department typically include planning, organizing, auditing, accounting
for and controlling its company's finances. The finance department also usually
produces the company's financial statements.
• Working Capital Management

• Quarter sequentially, while Current Liabilities diminished, this prompted

improvement in Itc Holding’s Working Capital Ratio to 0.34, Working Capital
Ratio stayed underneath Itc Holdings Corp normal.
 Marketing Department

• Introduction

• A marketing department promotes your business and drives sales of its products or services.

• It provides the necessary research to identify your target customers and other audiences. Marketing
Department Structure
• The structure of a promoting division will fluctuate dependent on the necessities of the business.
• The characterizing challenge for promoting associations in the 21st Century is auxiliary, as Forbes puts it.
• Head showcasing officials comprehend that their associations need a reexamine
• Advertisers comprehend that their associations need an upgrade, and numerous head showcasing officials
are destroying their organization outline
Classification of Products or Goods
Customer Segmentation
Targeting
Sales Procedure
 Comparison of 4ps with Competitors

• Product in the Marketing Mix of ITC • Place in the Marketing Mix of ITC

• ITC has a diversified business portfolio  • It is served by an effective workforce that
incorporates administrations of in excess
• ITC occupies 81% of market share in terms of
selling Cigarettes in India • Its central station base is at Kolkata in West
Bengal.
• ITC is ranked at first position in terms of branded
foods • Its items are accessible in numerous worldwide
nations.
• The company sells lifestyle apparel
• Assembling plants of its printing and bundling
• It is involved in stationary business
division are in Chennai and Haridwar.
• The company is involved in Hotel and service
business
• ITC operates Information Technology business
sector
 Continue
• Price in the Marketing Mix of ITC: • Promotions in the Marketing Mix of ITC:
• ITC has a working salary of evaluated rupees • ITC has a well-built brand presence
15,037 crore
• It has taken help of several promotional activities
• It has a few business interests and faces heaps of
• ITC has adopted an aggressive marketing strategy 
rivalry from rival organizations.
• ITC has launched several ad campaigns
• ITC for its lavish items like lodging business has
received a superior estimating strategy • ITC has also roped in famous personalities for
• Item costs are pocket neighborly and reasonable better visibility
Pricing Policy
 Promotion and Advertising Policy

• Cigarettes business has an inside code for publicizing/advancements

• It not just completely covers all parts of different codes yet in addition incorporates territories not secured by
them.
• All laws identified with the item class
• The FMCG Cigarettes business sells a legitimate item
• The Foods business willfully follows the ASCI
• Furthermore, a month to month consistence approval is finished by particular supervisors.
• In the Paperboards and Specialty Papers
• None of the items from these organizations is prohibited
• Agri-business has not publicized its item and administrations
• The Leaf Tobacco business gives Corporate Advertisements as per the arrangements of Cigarettes and Other
Tobacco Products Act
 Human Resource Department

• Introduction
• HR departments are responsible for overseeing employee-benefits design
• Job Qualification & Experience
• Applicants who are truly attempting to make sure about the activity in ITC Limited should clear the
composed test and meeting process
• The applicants who overcame the meeting procedure will be chosen by the organization.
• Hopefuls should rehearse ITC Limited position papers to split ITC Limited composed test or ITC Limited
online test.
 ITC Limited Selection Process

• Aptitude written test online

• Technical interview

• HR interview

• ITC Ltd is a multi-business company starting from hotels to consumer goods.

• The applications received through the official site would be shortlisted for the basic criteria.

• Those who are selected in this interview would be provided the job offer.
Job Description
 Human Resource Planning Process

• (HRP) is the continuous process of systematic planning

• They ensure the best fit between employees and jobs while avoiding manpower shortages or surpluses.
• There are four key steps to the HRP process.
• There are four general steps in the HRP process
• Human asset arranging permits organizations to prepare
• Human asset arranging should be adaptable enough
• To accomplish a continued upper hand in the business condition organizations must attempt to adjust their
human asset techniques
• ITC, being a pioneer in the Indian business zone
• Business level methodologies are planned with a thought process
• ITC accepts that their strategic upgrade esteem creation
Performance Appraisal
 Production Department

• Structure of Production Department

How Production Plan Is Prepared
Analysis of Plant Location Production Layout
 Provision for Material Handling

• ITC's pre-eminent position as one of India's leading corporates in the agricultural sector
• A unique rural digital infrastructure network
• ITC sources the finest of Indian Feed Ingredients
• ITC's Agri Business is the country's second largest exporter of Agri-products.
• ITC's remarkable quality around here is the broad in reverse linkages
• The special e-Choupal model makes a huge two-way multi-dimensional channel
• Material taking care of includes short-separation development inside the limits of a structure
 Quality Control System

• Quality control (QC) is a procedure through which • Quality Policy

a business looks to guarantee that item quality is
• ITC Products Has a strong responsibility to
kept up or improved.
providing results
• A significant part of value control is the foundation
• To this end the Company has set up and keeps up a
of very much characterized controls.
quality framework
• Quality control includes testing of units and
• All degrees of work are urged to be ace dynamic in
deciding whether they are inside the determinations
their methodology and persistently survey
for the last item.
• It is the administration's reasonable purpose that
• Quality testing includes each progression of the
this approach and its destinations are appropriately
assembling procedure.
clung
• The quality control utilized in a business is
exceptionally subject to the item or industry.
• In car fabricating, quality control centers around
the way that parts fit together